president of the united states. >> we are greater than the sum of our individual ambitions and we remain more than a collection of red states and blue states. we are and forever will be the united states of america. >> and then say good-bye to 2012 in all its moments. historical and hysterical. sandy crowley, washington. >> one of the biggest political moments playing out right now at the white house. let's go live there to the white house you november and show you what is going on. there it is. the president has made a proposal. it says if they don't have a counter proposal, the president is asking for an up or down vote in the house and the senate. picking it up from here, candy crowley will be doing "the situation room". thanks for watching. now to candy.

happening now, new details of the meeting between president obama and congressional leaders for what could be a last-ditch effort to avoid the fiscal cliff. families in the making ripped apart. russia officially bans the adoption of russian children by americans. and for the second time in a month, a man pushed to his death from a new york city subway platform in the path of an oncoming train. wolf blitzer is off. i'm candy crowley. you're in "the situation room." all eyes on that white house this hour. and the meeting that may be the last best chance to keep the country from going over the fiscal cliff. right now, the leaders of the house and senate are sitting down with president obama in a search for an 11th hour deal to

prevent severe tax hikes and spending cuts from automatically kicking in with the new year. cnn's chief white house correspondent jessica yellin is getting new details. jess can ka, what are you hearing about that meeting? >> reporter: candy, the president is going to explain or reiterate the position he took on friday, that he would like a plan that extends tax rates for people who make $250,000 and below but raises them for those who make more than that. that it extends unemployment benefits for americans. and if the president, i'm told will say if he does not get an agreement to that plan, he will ask the other leaders what they can agree to, what what they would like instead. if they cannot come up with a proposal that will pass the house and the senate, will ask for a vote on his measure. but that meeting, candy, is still going on. congre congressional leaders arrived at the white house for a last-ditch

meeting just days before a new year's deadline. back on the hill, pressure to break the stalemate. >> we've got to demonstrate we have some capacity left to make decisions in washington on these very significant issues for the country. >> if we don't have a deal within the next 24 hours, the question is where do you buy a pair of shoes? >> reporter: ne met inside the oval office to avoid plunging over the fiscal cliff. if they agree to a plan, each of these players has a role. senate majority leader harry reid quickly moved the measure to a vote. minority leader mch mcconnell assured that no republicans block the bill. house speaker john boehner agreed to bring the bill to a vote on the house floor. and leader nancy pelosi with the number of votes needed to pass. >> what folks are looking for and all of us agree on this is

action. they want to see that we are focused on them, not focused on our politics here in washington. >> reporter: that was the last time this group met more than a month ago. with time running out to forge a scaled-down compromise, can they agree on even the most basic elements, extending some income tax cuts, preventing pay cuts to medicare providers, fixing the alternative minimum tax. among the options to gain votes, averting an estate tax hike toll woo republicans. there's still time but no room for error. if congress doesn't act -- >> the impact psychologically and financially on americans of another plunge in the negative territory for the economy would be extremely harmful. >> reporter: and candy, as i said, those leaders are still meeting with the president. we'll see if any of them come out and speak to us after that

meeting breaks up as soon as we have any word on whether there is an agreement, we'll bring it to you. >> jessica, it's interesting to me the president's idea like if we can't get an agreement, let's just have a straight up or down vote in both houses on my plan. and here's what i can't figure out, whether that's a trap for republicans because then they can be accused of not even allowing it to come up for a vote and that's a great political talking point or is it a way out, saying look, we felt the situation was dire and we should put these things up there and see how the vote went. which is it? >> reporter: i'm going to take the easy answer today. it's a little bit of both. they are confident it has the votes if they would bring it to the floor. >> sure. >> reporter: so if they could get it to a vote, that's what they would want. and if they can't can, they can always have the talking point that they tried and it was blocked. so either way, that would be a win for the white house, wouldn't it? >> it would indeed. thanks so much, jessica yellin

at the white house for us. we want to get more with cnn ryan lizza. he's washington correspondent for "the new yorker." the president says, here's my plan. it's kind of the same plan that they all said, that's not a plan. to the republicans, they said that's not a plan. okay, fine, just take a vote. it would mean that he believes that he could get enough republicans to get it through the house for sure. >> yeah. look, because of the filibuster in the senate and because john boehner wants a majority of his republicans in the house to pass anything, the president is stimied. there is a ma majority in the senate for a deal. there is a majority if you have a few republicans and democrats in the house and yet we can't get a deal to pass the chamber. so i think the white house, which now realizes that the negotiations with boehner failed. they are not going to get an actual negotiated settlement and they are not going to get an actual negotiated settlement with mcconnell in the senate. this meeting i think is for a little bit of show, frankly.

because they never hash out a plan. >> right. >> the whole deal had to be hashed out between obama and boehner and that failed last week. so this is a bit of show and obama's now going to put the own news back on the house and senate and remind people that there is a majority for a plan. it's just not one that most republicans would support. >> right. they won't even let us vote on it. but the thing is, i actually don't think that boehner has -- now has a requirement of the majority of his caucus should vote for it. >> it's unclear what his requirement is, right? if he would allow a vote on this plan and get almost all the democrats presumably and handful of republicans, i think it would break the deadlock, right? >> yeah. >> so this is a little bit of obama throwing it back in congress' court and saying, there should be a majority for this passing. but republicans are not going to -- they are going to be very, very cool to this today.

>> let me ask you about the politics of this post january 1st. let's say nothing happens, they can't get a deal. it's now january 3rd. who wakes up in the more powerful political position to get what they want in a fiscal cliff deal? >> it's kind of a strange situation. most conservatives in the house want to go over the cliff because they want to vote to lower taxes and they will have the ability to do that once taxes go up after january 1st. >> it just sounds better. >> right. >> rather than i let your taxes go up. >> exactly. i think politically, though, all of the policy moves in the direction of the democrats, right? tax rates go up. big spending cuts at the pentagon. and all the polls show that the republicans are going to be blamed for all of this. so obama -- as the one guy in this town that wants a deal more than anyone. on the other hand, he's probably the guy that purely political benefits the most after january 3rd satisfy in a stronger negotiating position. he'll also have, remember, a few more democrats in the house and

in the senate. so the white house will be strengthened after this happens. but a lot of people in the white house and treasury department don't want that to happen because they think the markets may freak out. already the markets are reacting to the news within the last hour. yesterday the markets dipped a little bit on reid's comments in the senate. so they are worried about the economy. i think purely politically, obama will be strengthened once we go over. >> ryan lizza, thank very much. it's going to be an interesting couple of days. >> yeah, it sure is. >> thanks, ryan. weapons of war on the streets of los angeles. details of a shocking find in a gun buyback program. [ sniffs ] i have a cold.

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they are deadly weapons of war no one expects to see on the streets of an american city so you can imagine the shock when a gun buyback program in los angeles yielded rocket-propelled grenade launchers. kyung lah, what are you finding out about this story? >> police are saying it's certainly stunning but they are not surprised. this is something that they deal with every day. weapons on the streets of los angeles, certainly very rare that they come across something like this but they are hoping that by showing it it gives americans some pause and perspective. a rocket launcher. not just one but two handed over to police in this week's gun buyback day. shocking? not to police who have seen it before. among the roughly 10,000 citizens since 2009. >> we look like we're in a third world war nation when you see all of these weapons and the

question you have to ask is why? >> these were u.s.-made and owned privately although legal. they thankfully had no rockets in them. police also collected 75 assault rifles that people traded in this week for gift cards. >> i don't think anyone should be surprised two rocket launchers were turned in. this is l.a. >> l.a. and much of america, says aaron cohen. this should be a reality check, he says, and a sign of how military-style weaponry can so easily end up in the wrong hands, like they did in the newtown massacre. >> there's way too many weapons out there on the streets. the type of weapons that were brought in the other day, it's just redid cue louse. >> so you think it's gotten out of hand? >> i think that the system of issuing them has gotten out of hand and i think we have, again, have to look at the entire safety system involved with

giving handguns out. >> gun shows and easy background checks cohen says, that adds up to an overly armed america. the people who turned in guns, most of them legal, came from all walks of life. >> i have grandchildren and no matter how secure you think your gun is, when you've seen what has happened, so i decided to turn it in. >> many of the weapons that were handed over to police in the gun buyback were antique. some of them were not functional. but police say it's just a window into a look of how many guns are in los angeles in the city. candy, they are estimating millions of guns exist in los angeles. >> i don't know if you know the answer to this question, but i'm pretty sure you can't buy a rocket-propelled gun launcher in a gun store, can you? >> no, you cannot buy one. it a very difficult to obtain.

>> this came from overseas or someone bringing one in or do they have a theory? >> this is u.s.-made rocket launcher. >> right. >> they don't ask the individual where it came from. that's part of the reason why people turn it in, because there's no retribution against them when people turn over the weapons. police say that's critical to making this gun buyback process work. but they stress it is u.s.-made. it was produced here. they just don't know how it made its way through to the hands of the lapd. >> thanks, kung lah. angry and grief. a teenager's suicide and why investigators are taking some of the blame.

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another brutal rape case in india is drawing outrage. a 17-year-old girl committed suicide after alleging she was gang raped a month and a half ago. inaction on the part of local police may have played a part in this story. >> reporter: family and friends of the 17-year-old victim were grief-stricken at her funeral on thursday. the girl's mother overcome with emotion cutting a picture of her

daughter tightly to her chest. the teenager died wednesday after taking poison. her death comes a month and a half after she says she was brutally raped. in a november interview with our sister network, the victim described her alleged attack. >> translator: i was raped by two boys. it's been two days since i've filed a complaint. they threatened me by saying my family and i will be killed. i demand justice. >> reporter: according to police reports, the incident happened on november 13th during the festival of the raleigh when three suspects abducted the girl, raped her several time and dumped her on the road. the girl's family tried to report the case for two weeks but say police pressured them to withdraw the complaint. >> translator: my daughter was extremely sad and took her own life. >> reporter: the girl took her own life accusing two men and a woman blaming them for her death. she says in a note that when

police finally did look into the case, they humiliated her by asking obscene questions about the attack. after her death, police quickly arrested the three named in the note claiming they had been investigating all along. >> translator: we have been probing the case and we have now arrested the men after they got their names. we will take necessary action on the suicide. >> reporter: but the district's police chief says that local police officers were negligent in their handling of the case. >> translator: for almost 14 days no action was taken, nor case was opened. >> reporter: two police officers have been fired and another suspended over the incident but that's little consolation to the young girl's family. >> in a separate case, doctors treating a 23-year-old indian woman gang rained on a bus in new deli say she has taken a turn for the worse. her doctor says she is showing

signs of severe organ failure. there are signs that russia may be finally changing its position on syria. lisa sylvester is monitoring that and other stories in "the situation room." what have you got? >> this could be a significant development. syria's civil war rages on and the death toll rises. russia has officially invited the head of syria's opposition for talks. the invitation comes despite russia's criticism of the u.s. and other nations that recognize the syrian national coalition as the country's legitimate representative over president bashar al assad. and an historic drought in america's midwest is threatening navigation and commerce of the mississippi river. sharply lower water levels and ice that is slowing water flow could disrupt critical barge traffic.

contractors are working to remove rock formations in an effort to maintain a deep channel. and america's population growth is slowing down. the government says it's due to lower birth rates during the economic recession and lower immigration numbers. as we start the new year, there will be 315 million people in the united states. the population, though, has grown less than .75% since 2010. so a slower rate of growth. still, 315 million people is -- >> seems like enough people in some places, that's for sure. thanks, lisa. hopes have been crushed and families in the making ripped apart. a new law bans americans from adopting russian children. ng tom about that tiramisu. what a night, huh? but, um, can the test drive be over now? head back to the dealership? [ male announcer ] it's practically yours. but we still need your signature. volkswagen sign then drive is back. and it's never been easier to get a passat. that's the power of german engineering. get $0 down, $0 due at signing,

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from what we surmise, this meeting at the white house between the president and congressional leaders is broken up. at least so far as nancy pelosi is concerned. you can see this tape. she obviously has left the meeting. john boehner, the speaker of the house, has also been seen leaving. so what we want to do is find out what is going on here. obviously we have our jessica yellin there and we will talk to her a little later about what she has learned. now, the fiscal cliff and these last-ditch talks is the only game in town. joining me for today's strategy session is roland martin and cnn contributor erick erickson,

editor-in-chief of. they are saying, hey, we don't have to compromise. we have more people in congress coming in that are democrats. the president doesn't have to give on that $250,000 top. where do you stand on this? do you think the president does or should compromise up to -- particularly on the tax issue? >> you can't be a democrat and ask republicans to compromise if you don't want to give up something. i think the president clearly understood that. so when he laid the $250,000 out, he gave himself some room because, again, you saw speaker boehner's proposal, it dealt with 1 million. look, you have to compromise. democrats can't say, hey, we have more folks coming in because the republicans still control the majority in the house. you have to give to get. it's as simple as that. >> so at the moment that's a no for you for democrats giving something up until they see signs from republicans who, i should point out, have said we

will raise taxes for some folks. that's something, is it not? >> president boehner had to pull the deal off the table when it came to taxes of folks above a million dollars. it's not like they are saying we are going to give up a lot. if that bill passed, then you have a marker. the bill didn't even go up for a vote. there's no marker for the gop. >> erick, i want to talk about something that you wrote today. the leaders on both sides are incapable of negotiating their way out of a burning paper bag, which is a great phrase. the problem here is that paper bag is burning sort of across american voters here. so what do they do now? just say we can't get this and give it up? they have to keep negotiating. >> well, they have to keep negotiating or do what they were doing with hurricane sandy where they couldn't get the legislation out until they amended it. most the amendments are going

down in flames with the democrats but republicans are feeling like at least they can make some additions. you have the leaders doing all of the negotiating behind closed doors. >> what about this idea that the president was saying, if you can't agree to my $250,000 and some other things and no changes in estate taxes, just put it on the floor for an up or down vote s that okay with you, erick? >> no, i don't think so. i don't think the republicans need to give the republicans the talking point that they killed this plan without the president doing something. look, plan b would have passed. republicans would have supported it. i would have supported it even though i didn't agree with. >> roland, where does this go from here? >> heck if i know. i say kneel down and pray.

you have people locked in -- look, both sides are simply playing chicken. republicans are hoping that democrats blink. they are thinking, president obama has blinked before. he doesn't want to see the markets crash. at the end of the day, who gets screwed? who gets screwed? americans. the people who don't have unemployment benefits, the folks out there -- barbara starr talked to someone making $23,000 at mcdonald's whose taxes are going to go up. it's the american people, the average people, they are going to get screwed by congress not being able to do their job. >> erick, want to play something that charles said last night and got reaction from you. >> he's been using this -- and i must say with great skill and ruthless skill and success to

fracture and basically shatter the republican opposition and his objective at the beginning was to to create an internal civil war and he's done that. >> do you think the president is responsible for creating a civil war in the republican party? sorry, erick. >> i think to a degree he is although i think john boehner has more on that having cut the deal to raise taxes on $1 million or more. the republicans have had to hold this line. they would have opened them up to bigger fractures. yes, to a certain degree i think charles is right. >> the president won by winning re-election. that's what happened. he won. >> that does tend to happen after you lose a presidential election. yes. >> let me get you both to this. this is probably the last time i'll talk to you between now and

2013. so i need you to say -- you cannot say the president or mitt romney in the answer to these questions. name your political winner and loser of 2012. roll land? >> winner, latinos, prejudice is going to push forward when it comes to immigration reform and folks from the west indies and caribbean and other parts of the country. my loser, crazy republican males who don't know how to talk about the issue of rape. don't touch it or you're going to get burned. that's the biggest loser of 2012. >> okay, erick, i know he doesn't include new that crazy white thing that he's talking about. what are your winners and losers? >> he just doesn't like the way i dress bill burton and the super pac. lose ares on the left, unions are huge. and losers, john cornyn, horrible recruitment two years in a row and this time they didn't have jim demint to blame. >> don't blame that texan on me. >> okay.

take it up with him after the show. erick erickson, roland martin, thank you very much. happy new year, guys. hopes have been crushed and families in the making have been ripped apart. a new law bans americans from adopting russian children. welcome to chevy's year-end event. so, the 5.3-liter v8 silverado can tow up to 9,600 pounds? 315 horsepower. what's that in reindeer-power? [ laughs ] [ pencil scratches ] [ male announcer ] chevy's giving more.

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russian president vladimir putin has signed a controversial bill barring americans from adopting russian children. the new law is heartbreaking for hundreds of families in the adoption process now. foreign affairs reporter elielis elise labott is at the state department. what are you hearing? >> it's always a lot of tense words but today i spoke to officials who are just sad, that the russians are really playing politics and denying children in russia a better life. let me read you a little bit of a state department statement saying the russian government's politically motivated decision will reduce adoption possibilities for children now under institutional care. we are further concerned that statements that adoptions already under way may be stopped and, candy, there are about 46 children who are still in the

pipeline right now. russian officials are saying that these children could be put back in the russian registry for adoption in country but there's no guarantee that they will be because there are about 120,000 children in russia waiting to be adopted right now and the state department, u.s. administration really in a debate right now how far to push this because, as you know, a lot of other issues at stake in the relationship with russia, such as syria, crisis with iran, a lot going on. >> sure. but this certainly is one of those emotional issues. america always prides itself, we've seen what happens in connecticut. we talk so much about protecting our children and for some of these family they were already their children although they were still living in russia. is there anything that the u.s. government could do? what would be a response that might evoke a response from russia? >> well, right now the state department is asking the parent of these children to sit tight. they are working on negotiating

these 46 cases, making sure at least those children who have already bonded with those parents already in the pipeline waiting to be taken back to the united states could be, if you grandfathered in, if you will, and then they are trying to work with the russians on lifting the entire ban. there is already an adoption agreement between the u.s. and russia that they've been negotiating for about two years. it was just signed in november. this ban that was signed by president putin doesn't repeal that treaty and the u.s. is encouraged by statements by russian lawmakers and other cabinet ministers that say that maybe this ban could be lifted because it's certainly as it has touched here in the united states, it's touched a nerve in russia about whether it's best for the russian children and best for the russian relationship with the u.s., candy. >> elise, thank you so much for that update. this is drawing debates from u.s. lawmakers. senator john mccain says, i often wonder how much lower the

russian government under president putin can stoop over to punish babies and children over a political disagreement between our governments is a new low, even for putin's russia. and a similar ban was enacted but later dropped and he joins me now. this must bring back horrible heartbreaking memories for you having been through something similar. you knew your boys? >> i did. i did. and like elise said, this is a very sad day. it takes me back to 12 years ago when president putin put a severe similar moratorium on adoptions when i was in the middle of it. >> and so i know that you still advocate and are involved in the community of american parents who adopt russian children. have you talked to current families who have some children that -- >> i stay in close contact with the center for national adoption and i know they are working

very, very hard on behalf of these kids but my heart really goes out to these families. at this time of year especially, i can't believe we're standing here talking about this yet again. when we talk about the families, it's so important to remember that these are kids we're talking about. these are not political pawns. these are little children. >> in institutions at this point. >> babies. right. you have your two boys here and they are beautiful. we have them in the studio here. have you talked to them about this? what are they saying? >> well, my guys have grown up here in america. they are very proud of their heritage being russian, but they are also thriving in america. they are athletes. they are getting a great education. they are -- you know, they are just wonderful young men. absolutely wonderful. and i just can't help but think of what would happen to them had they stayed in an orphanage in russia. the very best orphanage in russia can't compare to a home to to a family. >> anywhere. and a family that wants them. >> absolutely. >> and you had met your sons.

>> well, i had met them on a video. >> oh, on video. >> i had gotten a video and they had become mine. they were in my heart already and i just wanted to scoop them up. and when the ban came, when the moratorium came, we didn't know it was temporary and it was devastating. it was absolutely devastating. and i can't imagine these kids who have met their families. >> the families have been over there in many cases. >> absolutely. and they are dreaming about their homes. they are dreaming about an american mom, dad, brother, sister. and now unfortunately they are going to have to wake up from these dreams and look around and realize they are still in the nightmare of a russian orphanage. >> and is there something that can be done that you see is an easy fix here? here is a child that you already consider your child and they are caught up in something so far above your pay scale and there's nothing you can do. >> governments and politics are so big and the families are so small and the children are so

tiny that it is. it is a very helpless feeling. but there are very, very dedicated people in the government and in nongovernment organizations that are working to make this -- this to make to make this go away. we are optimistic that president putin somehow will become a hero to these kids. >> and what do you say to supporters of this law who say, look, these children need to be taken care of in russia. >> absolutely. i agree with that. it would be wonderful if russians were adopting. but they don't, you know. and international adoption is not about finding children for parents. it's about finding homes for these kids that so desperately need homes. i would love for every child to be adopted in russia by russians but it's not happening and there are people here lined up waiting. >> and russia adopgs have been on the decline.

i know the process takes a couple years, really? >> it's up to two years and takes up to three trips to russia. we should be working on making this easier, not harder or now it seems impossible. >> i imagine just seeing your emotion and how you feel about this and these two little boys that -- is there something you'd like to see? does it meet the presidential test to you? >> president obama is a family man. he's got his two beautiful daughters. i have my two beautiful sons. there are so many families that want beautiful kids and that need families. i think, you know, president obama would be my hero. would be my hero if he would do what a dad needs to do. >> thank you for coming in and sharing some of your story. we wish all of those families waiting out there anxiously, we hope it somehow gets worked out. >> thank you so much. >> boys, thank you for kwoming

in. police are now searching for a woman who witnesses say pushed a man into the path of a oncoming subway train. it's the second such killing in a month.

a horrifying death that may give chills to anyone who rides

the subway and for new yorkers, it's a gruesome repeat of a crime that shockeded it city. cnn's poppy harlow has the story. poppy? >> reporter: candy, twice this month someone is pushed from a new york city subway platform in front of an oncoming train and killed. it happened right on this platform on thursday. >> it was horrible. fell to the bottom and i never want to hear something like that again. >> reporter: this man heard the final scream of the victim. james callanan's train was halted because of the incident. >> they said this is the last stop, debris fell on the tracks. that's all they were telling people. >> reporter: the victim was standing on the edge of this subway platform in queens when a woman who was pacing and talking to herself pushed him on to the tracks. surveillance footage captured this woman running from the station. police are searching for the woman they describe as heavyset,

in her 20s, wearing a ski jacket and sneakers. >> we do live in a world where subway platforms are open and that's not going to change. >> reporter: at a news conference on friday, mayor bloomberg and ray kelly were inundated with questions about the subway death. mayor bloomberg, a second subway pushing death in this city in less than a month, i'm wondering what your reaction to that is, how can it be prevented? >> i don't know if there is ways to prevent. there is always going to be a deranged person. >> reporter: just this month, a 58-year-old man was pushed from the tracks in times square. >> reporter: would you consider putting more police on the platform in the wake of what has happened this month? >> we feel that we are properly deployed. >> reporter: so not something you would consider at this point? >> you show me anyplace in this world where you have 5 1/2 million people get together where there is virtually any

crime. >> reporter: they said people should stay away from the platform edges and be aware of their surroundings at all times. bill henderson advises the mta. what can be done to prevent things like this? >> well, i mean, not -- you can't eliminate the possibility. but this is a very rare occurrence. >> reporter: why not put some sort of barrier here? >> well, you have different car types running on the tracks in new york city subways and they have doors placed at different points along their length. if you ran a different kind of car, you'd have to move the openings. >> just not practical? >> just not practical. >> reporter: very expensive? >> very expensive. >> reporter: keep in mind, subway deaths like this are very rare. years go by without them happening. the same is true in other major cities like washington, d.c., and boston. candy? milk lovers could be in for some sticker shock. would you believe $7 per gallon?

a side effect of fiscal cliff negotiations in lack of action on a lot of other legislative matters. the farm bill expired last summer with no measure from congress to rereplace it. one of the protections for farmers that goes away december 31st is the dairy. that means prices could skyrocket. i brought that up with secretary vilsack. in the short term it seems to be, why does anybody care that there's not a farm bill on january 1st? what will happen to me or my family sitting here in washington, d.c.? >> well, if you like anything made with milk, you're going to be impacted by the fact that there's no farm bill. because if there is not an extension of the existing bill or a new bill, basically on january 1st or shortly thereafter, permanent agricultural law goes back in place, 1949 law, the federal government will go back into the

business of strongly supporting and i mean strongly supporting the dairy industry by raising the price for dairy products for 38 dlaurz to underweight. that's almost double the price that dairy is today. that's going to ultimately ramp up so when consumers go into the grocery store instead of seeing $3.60 a gallon for milk they are going to see $7 a gallon for milk. so it impacts consumers. it impacts those of us concerned about the energy and security of this country because the farm bill contains ways to promote alternate energy sours, ways to create a biofuel industry that is robust and creates consumer choice. for those concerned about exports connected to the agricultural exports, we lose the ability to market exports without a farm bill. if you're concerned about the ability to add adequate nutrition and supporter of farmer's markets and want to see

an expansion of that, can't do it because there is no farm bill. if you like the idea of fields expanding habitat opportunities or you like to hunt and you like to fish, your hobby, your vocation, if you will, in that area will also be affected by no farm bill because a lot of the programs are not extended. if you're a farm family, you're going to be impacted. so there is an impact and an effect by not having a farm bill. >> congress has three options before the end of the year to prevent the price spike and everything that comes with it. they could either extend the current bishlg pass a new bill or some kind of provision to keep the 1949 farm bill from taking effect. he thinks the role of people are losing power. my interview with secretary vilsack on state of the union at

9:00 a.m. eastern. the white house meeting between the president and four top leaders, the meeting is over and according to our senior congressional producer, deed dra wall, she says that nancy pelosi returning to the capitol said that the white house meeting was constructive and candid, which means argumentative. ex speaker pelosi said the president led the meeting and to see what senator mcconnell and or leaders in the senate could work out between the two of them. pelosi also said that john boehner said that he would only bring up something for a vote in the house if the senate passed it first. so that's what we know about what went on in the meeting. of course, all of our reporters are checking into that and we will have more news for you on that meeting and the possible outcome as soon as we get them back up there checking it out. now, an iconic piece of

human history wrapped up. we'll show you what it is and why it's being shielded when we come back. 315 horsepower. what's that in reindeer-power? [ laughs ] [ pencil scratches ] [ male announcer ] chevy's giving more. get the best offer of the year -- 0% apr financing for 60 months plus $1,000 holiday bonus cash. plus trade up for an additional $1,000 trade-in allowance. hurry. bonus cash ends january 2nd. ♪ ♪ [ male announcer ] everyone deserves the gift of all day pain relief. this season, discover aleve. all day pain relief with just two pills.

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here's a look at this year's

hot shots. in pakistan, a vendor arranges apples on his donkey cart. a look at laptops at a come utter congress. in albania, a boy looks over the turkeys that he's selling. hot shots, pictures coming in from around the world. former president h.w. bush could soon be released from a houston hospital. lisa silver sister is monitoring that. >> hi, candy. good news on that front. the former president is singing, yes, singing with the hospital doctors and nurses. the family is confident he will soon be able to leave. he's in the intensive care unit being treated for an elevated fever. he was treated for complications due to bronchitis. and a move to lower phone bills for federal inmates. sky high rates, a typical

15-minute state-to-state call can can cost $16 because most prisons cost huge commissions to providers. officials say they want to reign in costs. wall street closed lower for the fifth straight friday and ended the week down almost 2% as fear about the fiscal cliff continues. selling gained steam when no progress was reported in the meetings between president obama and congressional leaders. the dow was down 150 point today. the nasdaq and s&p down 15. candy? >> not a way to end a year or start a new one, is it? >> i know. but it's not entirely unexpected considering we get closer and closer to the fiscal cliff. investors get spooked. >> and it's the stock market. what goes up goes back down. thanks, lisa. visit the kennedy space center and will you see

something very impressive but still under wraps. the space shuttle "atlantis" flew many missions ins day and now it's the site of a new exhibit that will be unveiled next summer. cnn's john zarrella is there. hey, john. >> reporter: candy, we are here and we have the hard hat on because we are in a working area construction site. this is the massive building that will house and actually already does house the space shuttle "atlantis" which came over here in early november. for the viewers out there, if you can't recognize it because it doesn't quite look right, that's "atlantis" wrapped in 16,000 feet of shrink wrap. it kind of looks like a caterpillar in a kok couldn't. come march, it will spread its wings when they take the wrapping off of it. the shuttle is at a 43 1/2-degree angle here because

that's the angle that it would be when it's flying in space and suspended off the ground here and people will be able to walk around here, walk by it, walk around it. and i have tim macy with me. i know you left that whole wall off he in order to get the shuttle in here from over at the nasa site. that had to be one heck of a job getting it in here. >> it was close. on paper it looked pretty easy but when it came down to it, moved it around just a little bit. the wall itself was about 85 feet wide and the wing span, as you know, is about 82 feet. we didn't have a whole lot of room to move it around. >> reporter: but never a concern that you would get it in here? >> never, ever a concern. we always knew it would get in. >> reporter: people are going to ask, can i go in it, can i touch it? >> it's a pricele artifact. as much as we'd like people to

be able to do that, it's not going to happen. you'll be able to get really close and touch some of the things that were actually inside the shuttle itself back when it was flying. we've broken that out into some exhibits that are available below it. >> reporter: thanks, tim, very much. we have a couple of artist renderings that show what the building is going to look like when they have the grand opening in july and not only the shuttle which is the centerpiece of all of this but there will be a telescope replica suspended here in this exhibit area. there will be about 60 int active games and such for people to see and use and play with and get an idea of what it's like again, it last flew in july 2011. that was the final shuttle flight of the shuttle program in history and atlantis, of course, the last of the shuttle fleet to

fly. candy? >> john, thanks so much. it looks like fun. i will be there next summer. >> sure. you're in "the situation room." happening now, the uniquely washington version of let's make a deal. we have the latest from the this afternoon's big meeting in the oval office. who's eavesdropping on your e-mail? the government may be. what congress is doing that may have civil libertarians up in arms. and a plea for help describing work conditions and it may be a hoax and dirty international politics. welcome to our viewers around the united states and around the world. wolf blitzer is off today. i'm candy crowley and you're in "the situation room." we begin with the latest fallout

from this afternoon's big meeting at the white house. republican and democratic leaders at the house and senate met with president obama to discuss ways to avoid the hundreds of billions of dollars worth of tax increases and spending cuts that hit in just four days. the meeting broke up about 45 minutes ago. cnn radio capitol hill correspondent lisa awaited the leaders' arrival. lisa, let's talk about what we can look for out of this meeting. is there any chance at all to get a deal before the clock strikes midnight on the 31st. >>. >> reporter: right. i think the key player is mitch mcconnell to watch. we're getting potentially more information about what is happening next. our capitol hill producer deidre walsh was there when some of the leaders returned and she spoke with nancy pelosi who said this meeting was constructive and candid. here's what is especially

interesting. nancy pelosi told reporters that the president led a meeting that ended with senators reid and mcconnell trying to work something out between the two of them. now it seems like we've gone from a process that was president obama and speaker boehner and then today to five leaders back to two. and those two, for the moment, seem to be senator reid and senator mccon until. also, i had a source in senator mcconnell's office who said we should be getting a statement from the republican leader of the senate any time now. so that statement will tell us a lot, candy. >> it will. but we also know that even though it's in the senate hands now which is basically where speaker boehner tossed it when he couldn't get his plan b passed by his own caucus, it doesn't mean that speaker boehner is out of the mix, right? because he's still going to have to pass whatever they pass in the senate, he's going to have to have enough votes in the house to get it passed and

particularly he needs at least a sizeable vote in his own caucus. he's not entirely out, is he? >> reporter: not at all. and i think you're familiar with this and unfortunately our viewers are, too. these are meetings to have meetings. the white house was trying to set up an even smaller group. senators reid and mcconnell to start the beginning of a possible deal. what they've got to is and and speaker boehner to see and then go fortunately there. and i think it's really meetings to have meetings and we also know senator reid when he returned to the capitol hill, deidre walsh was there. the next 24 hours are critical. and candy, if you don't mind, that reminds me of something that i heard from senator ben nelson. if we can, let's play that sound bite from a few hours ago.

we don't have that sound bite ready at the moment. i'm sorry about that. what senator nelson said was the next 24 hours are the window if something doesn't happen in this next day, then there may be no chance of getting a fiscal cliff deal by january 1st. so that's along the lines of what senator reid is also saying. here we are, critical hours yet again. >> they are running out of days, as you know. we'll get back to you when you get that statement from senator mcdonnell. thanks so much. >> you got it. cnn's chief correspondent ali velshi has a lose closer look at how lawmakers and president obama got themselves in this mess in the first place. >> now we've passed a bold package of tax relief for america's families and businesses. >> it starts more than a decade ago when then president george

w. bush initiated a series of tax cuts for all americans but it's a deal with the devil. the cuts, which are politically expedient but costly to government expire in ten year's time. >> both houses of congress have now passed a package of tax relief that will protect the middle class. >> when it came time for the cuts to expire, the u.s. is just emerging from the worst recession since the great depression. so president obama agreed to extend the tax cuts for two more years in exchange for congress extending federal emergency unemployment benefits. those cuts are expensive. if they are extended by 2020, the bush era tax cuts will be responsible for more than half the total national debt. democrats insist that taxes go up for the wealthy but stay in place permanently for those earning less than $250,000 a year. >> we need to stop the job killing tax sites and stop spending now. >> republicans refused to play

ball. they say no higher rates on the rich, no tax hikes on anyone. based on an ideology that calls for government to be as small as possible. its roots are as old as american politics but today the philosophy's main spokesman is this man. grover norquist. president of american's for tax reform. norquist's pledge signed by almost all republicans by congress forbids raising taxes ever under any circumstances. things come to a head in the summer of 2011. republicans demand that the government reduce its deficit as a condition for raising the debt ceiling. both democrats and republicans earth tactics that shut down the government and ultimately cost america its aaa credit rating for the first time in history. but in a last-minute compromise, both sides agree to a trillion dollars in spending cuts up front and another $1.2 trillion

in cuts to be decided by a special congressional supercommittee. but a poison pill was attached. if the supercommittee can't reach a deal, automatic across the board cuts known as a sequester would go into effect be at the exact moment when those bush tax cuts extended for two years would expire. so the point is we could have all seen this coming and some of us did. we yelled at the top of our lungs about it but were drowned out by the election. it seems that good governance gets drowned out by continuous elections in america. this time there may be a serious price to pay for it. >> if we go off the fiscal cliff, be will you notice an immediate change to your wallet? we want to get a reality check from stephen moore, a member of the wall street editorial board and author of "who's the fairest of them all?"

. stephen, we have spent six month talking about this can't happen we can't go off the fiscal cliff. we've got to meet this deadline and now they are saying, it's not that bad. which is it? >> look, i don't think it's the end of the world and i think it would get resolved in the weeks ahead but it's a black eye for our whole political system. think about this. here we are two or three days away from the start of the year without any american business or investor or workerer knowing what the payroll tax is going to be, income tax is going to be, i mean, this just isn't a very good way to run a country and it's almost like banana republic politics. >> my dad used to say, no way to run a railroad. let's talk about a couple of things. this whole idea that tax rates on everyone will go up. does the irs, does the treasury department have the ability to sort of say, look, here's some

guidance. keep withholding where it is? >> the irs is in turmoil right now. they don't know what to do. they are putting out mixed signals whether they can advise businesses what to do. i do think for those people who are really worried, middle class people are worried about their tax bills going up, i do think if we don't get this solved in the last day and i think there's a decent chance that we may get a resolution on december 31st. if we don't, sometime in january there will be resolution and i think what republicans said and even the president would go along with this, whatever we decide to do, let's make the tax cuts retroactive to the first of the year. >> what does that first paycheck look like into january? >> it could be -- you know, you could have that additional money wi withheld from your paycheck. the law -- this is is assuming

we go over the cliff. everyone is facing a higher tax increase. not just bill gates, not just warren buffett but anyone with an income over $25,000. and don't forget, by the way, the payroll tax goes up, too. every worker is going to get it. >> social security tax. which no one is talking about. so that says to me that those are going back up anyway. that's about a thousand dollar cost. it doesn't sound like people have to worry about their taxes and -- most people. but what about the psychological impact? haven't we already seen it in christmas buying? haven't we already seen it in -- won't consumer confidence take a hit? won't businesses still say, be i don't know. i don't know what's happening? >> it already has, candy. this year's christmas shopping season was lackluster at best. you mentioned businesses. i talk to small business men and women all the time. they say, we are not hiring

right now. we are just canceling a lot of our plans to make new expenditures which you need to do if you want a vibrant economy. we're really seeing the impact on the stock market. this is not a good way to run a railroad and the economy is already taking a hit because of all of this turmoil. and as i said, i'm a republican but i think both parties take a black eye here because nobody comes out of this looking very good. >> our polling shows that the republicans will take the biggest hit. but if you're going to take a political hit, do it at the end of an election season. >> that's true. >> if we get -- there are a lot of economists who believe -- i guess i put myself in this camp. if we don't get this resolved for several month and sometimes these political fights go on and on. this is at the core of what these two parties believe in. i think that it's possibly.

>> and if we don't have to push the panic button new year's day and looking at this thinking and feel the effects? >> i think starting at the end of the month, next month. >> end of january? >> if these guys can't get it together, we're going to have to totally change our family finances because we don't know how much taxes we're going to pay. for the average middle class family, we're talking about through the year, 2,000 to 2500. >> stephen moore, who believes that we can still get a deal, the last remaining optimism in washington, d.c. thank you for joining me. i appreciate it. the meeting at the white house has broken up. we're beginning to get bits and pieces from the capitol hill attendees. we are told that the ball now appears to be in the court of

senator reid who is the democratic leader in the senate and senator mitch mcconnell, the republican leader. we're also told that speaker boehner made it clear in that meeting at the white house that he wouldn't bring anything up for a vote until it passed the senate. i want to bring in jessica yellin. what are you picking up? what's the next thing we're going to see unfold? >> reporter: everybody is getting their word in and the next person to speak will be president obama. he will be speaking in the briefing room at 5:45 this evening. that's about half an hour from now. i would expect just based on how he handles situations like this in the past, it will probably not be a very lengthy statement. my expectation would be he will probably remind the american people and members of congress that there's not much time to go, that they have the basics for a deal and urge everybody to get this done quickly. but we will hear what the

president is -- what he has on his mind in just under 30 minutes now. so we can wait until he says it himself, candy. >> even if he talks briefly, you always can read a lot -- he picks his words very carefully so i suspect, jessica, we're going to get the tone of that meeting. >> from his body language, from his mood, yes, we've seen him come out of these meetings and speak to the press before and convey a sense of deep, deep frustration in the past and we've also seen him come out with a sense of positive optimism. so we'll wait to read the tea leaves. you know, so far not a whole lot of optimism but maybe things will change. we can always hope. >> we can. jessica yellin, we will see you in a bit. thanks very much. the government's ability to eavesdrop on your conversations. the bill that opponents say is too secretive. details, next.

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[ male announcer ] progresso. you gotta taste this soup. this is senator mitch mcconnell. he's the republican leader in the senate. >> i hope that we can come forward as early as sunday and have a recommendation that i can make to my conference and the majority leader can make to his conference and so we'll be working hard to try to see if we can get there in the next 24 hours. and so i'm hopeful and optimistic. >> i'm hopeful that i can do everything i can and that senator mcconnell can do everything he can. everybody, whatever we come up

with, it's going to be i am perfect and some people rbt going to like it. some people will like it less. but that's where we are. and i feel confident that we have an obligation to do the best we can and that was made clear in the white house and we're going to do the best we can for the caucuses that we have and the country who is waiting for us to make a decision. >> so that was the u.s. senate floor. that was harry reid. you just saw -- what the two of them said was what we had learned from others about the meeting that is in the next 24 hours we may learn if there's going to be a deal and whether this will bleed into 2013. it's up to senator reid and mcconnell say, it's going to be something i can sell to my caucus and it's going to be something that he can sell to his and senator reid said, look, it's not going to be perfect. that much we knew already. 24 hours, those two men trying to come up with something that will not just pass their caucuses but passed by enough in

the house to avoid this fiscal cliff. so we will keep you abreast of that again. we'll hear from the president at 5:45 eastern time. that's in about 15 -- 25 minutes. despite what you might think, congress is getting some work done. today senate sent president obama a bill that reauthorizes eavesdropping on communications in search of possible terrorists. in doing so, lawmakers brushed away concerns about violating privacy. >> this did not get much attention until today. the vote in the senate was not close and without much fanfare. one of the most hotly disputed tactics on the war on terror will keep ongoing. he ordered it just after 9/11 and became one of the most controversial tactics used by george w. bush to fight the war on terror.

the secret wire tapping of kmun kags between people in the united states and overseas. it drew fire because sometimes the communications of innocent americans got caught up. in 2008, the practice was authorized by congress but with limitations. a warrant is now required to target an american, including americans who are abroad. but it's still a hugely controversial program and the senate has passed a five-year extension of it. >> it's an enormous potential of abuse given the ugly history of the use of intel general surveillance for illegitimate purposes. >> they believe there are way too many innocent people being monitored. they say this classified program is also too secretive and pushed for more disclosure. >> i think we ought to know whether for purposes of the

amendments act generally, how many americans are being swept up under the legislation. >> but there won't be more disclosure because that got voted down. dianne feinstein, the democrat who chairs the senate intelligence committee, warned that shedding more light on who is being surveilled would you wo destroy the wire tapping program which she says has worked well. >> in four years, 100 arrests to prevent something from happening in the united states. some of which comes from this program. so i think it's a vital program. >> conservative analyst says a wide dragnet is worth the cost. >> let's suppose you're a pakistani, you don't have your green card, you call your uncle, yes, you could get caught up and maybe if he's a member of the taliban there's going to be somebody in the federal government who thinks we need to ask some questions of this

person. >> but if you're the person here talking to the uncle and you're caught up in this -- >> you're not caught up in the sense that you're going to jail, in the sense that anything bad is going to happen to you. >> but there are concerns about that. civil libertarian julian sanchez points out that the national security agency which does most of this surveillance has a massive new data center in utah where it stores innocuous communications. sanchez worries that anyone with a security clearance could pull private communication of innocent people. in response to that concern, we contacted the nsa, a spokesperson for that agency. quote, its operations will lawfully be conducted in accordance with u.s. laws and policies. without a doubt, one of the biggest misconceptions is that we're unlawfully listening in on or reading e-mails of u.s. citizens. this is simply not the case. nsa is unwavering in its respect

of american civilities. >> dianne feinstein has issued her own assure rans. >> she has. the intelligence committee is going to conduct what she calls extensive oversilth. look, seven years after we found out that president bush and his team was doing this, very controversial then and still controversial. >> a lot of thing shoved it off the center stage. >> right. >> thank you, brian todd. even after the cleanup, this year's snowstorm will leave entries in the recordbook. stand by for the latest. book. stand by for the latest. [ female announcer ] what if the next big thing, isn't a thing at all?

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you are looking at a split screen of the exterior of the white house as well as the white house press briefing room. the president is expected in that briefing room at 5:45 p.m. eastern time. a little over -- a little under give his version on what went on in the meeting he just held with

leaders on capitol hill. we do know that it has now been put to the senate leader to come up with some sort of compromise. we're going to get the president's version of what went on. we've just learned now some sad news. that victim of the gang rape in india has died. lisa sylvester is monitoring that and other stories. lisa? >> this is a terribly sad story, candy. officials say the 23-year-old woman who suffered a gang rape and severe injuries on al new delhi bus died a few hours ago. earlier they said she was experiencing organ failure. her attack led to mass protests where reported rape cases have increased drastically over the last 40 years. and nelson mandela is home after a long hospital stay in an exclusive interview, his granddaughter said he's well, alert, and playing with his grandchildren. she says social media rumors that mandela is, quote, close to

death, she said those rumors are hurtful and wants them to stop. he was hospitalized for a lung infection and gallstone surgery. okay. have you had enough of snow? snow now covers 65% of the 48 lower u.s. states. more could be on the way this weekend. two to four inches from the midwest to new jersey. the northeast could see more. in montreal, they are digging out of an all-time daily record of 17.7 inches of snow, which is unbelievable. i'm sure a lot of people who have holiday plans, the new year's eve plans are going to be keeping a close eye on the weather. candy? >> all of that snow and not a flake in washington on the ground. >> we're supposed to get some precipitation tomorrow morning. we'll see what happens. >> thanks, lisa. and now a desperate plea reinforces what many fear about working conditions in china but

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the u.s. government is investigating a claim that may be nothing more than a hoax but even if these specific allegations are disapproved, they speak to a larger concern about working conditions in china. the return appearance from lisa sylvester. you've been asking questions about this story. >> yeah. and the first thing we should say, is it a hoax or is this a cry for help. it's a letter reportedly from a chinese labor camp tucked in the most unlikely place and now this letter is getting lots of attention online. julie says she found the letter in a box of halloween

decorations. the halloween graveyard kit sat in her storage room for about a year until she dusted it off in october and all she could say was wow. >> it was definitely hidden. the headstones were, you know, approximately 18 inches tall, 12 inches wide and there were two of them put together and the note was slipped in the middle of them. and then that whole package was wrapped in sealed cellophane. >> the note written in neat hand with broken english says, sir, if you occasionally buy this product, please kindly send this letter to the world human right organization. the letter goes on to say the product was produced by the labor camp in china. people who work here have to work 15 hours a day without saturday, sunday break, and any holidays. otherwise they will suffer torturement, beat, and rude remark. julie keith posted the letter on her facebook page asking friends

what she should doll with it. she has since turned over the letter and the box that it came in to immigration enforcement. the case is under investigation. it is illegal to import products made by forced labor. keith is convinced that the letter is real but neither has cnn or officials been able to confirm the authenticity. the offenders are often accused of petty crimes and can be detained up to four years without any judicial process. >> the idea is they are being allowed to work while under detention. there has been a push by some sectors in china to reform or

resend such labor camps. >> there is a labor camp, the chinese embassy in washington did not return cnn calls and it's been likely the letter is legitimate and the halloween decoration was marketed and sold under the suppliers comply with no evidence that produced the halloween decoration. >> enforcement confirmed it is also looking into these allegations and typically and it

might take quite a bit of time, candy, before we get to the bol tomorrow of all of this. >> that's interesting. the letter might be a hoax but the problem we know is all too real. >> it's not so much whether or not this woman made up this letter. that's not what immigration customs enforcement think but somebody in the production chain, maybe in the packaging or someone else slip this in as opposed to coming in from a labor camp. that's going to take some time. >> to be continued. thank, lisa. opposition activists report at least 100 deaths and bashar al assad may be losing one of his biggest supporters, russia. they now want to talk things over with the leader of the syrian opposition. joining me now is nick paton walsh who is joining me about this story. nick, we have this russian plan from a purely diplomatic view. is there any chance that they can get agreement on it?

>> it already is facing problems. we've heard from the opposition party that he's happy to talk but doesn't want to go to moscow. he wants to go to an arab state with a clear agenda. we hear the egyptians saying they want to see this end with bashar al assad leaving power. and other say it's simply buying time for bashar al assad to kill more civilians in their eyes. it's raising problems but the net result of this in the eyes of many observers was never really about getting these names on the table to negotiate a peaceful end to this settlement. it shows that the russians for the past two weeks have been disparaging the leader of syria and willing both to talk to the opposition and perhaps maybe through this unsettle those around assad who may have been waiting for that moment, candy. >> it is is progress of some sort certainly it sounds like

even if it's not the agreement itself. i guess the question is, if the men in suits, the diplomats arrive with a plan, are the rubbles on the ground or, for that matter, the government troops on the ground going to listen to them? >> reporter: that's the major problem at this moment in time. the political leadership, this shut telling that has been going on for month now, very little from that itself. and the free syrian army all saying that they don't want anything to do with this. it's one spokesman for a fraction tur of movement that is and moving to take a key air base that might perhaps actually cut off much of their ability of the regime to supply forces in the north and give them much greater control over the country that they would suddenly agree to a settlement. for them it's about moving bashar al assad violently ending him and his regime and i think this particular bout may weaken

assad but not negotiate his departure. >> i certainly take it that we are not there in terms of peace for syria. this has been going on for quite some time. nick paton walsh, thank you for watching this for us. have a good new year. we'll talk to you on the other side. okay. to wrap up what is going on with the fiscal cliff negotiations, we know that there was a meeting between the president and the top white house leaders. we expect the president to appear in about 6 1/2 minutes to give us his version of what went on during that meeting. we know that the ball now appears to be in the court of the senate where the two top leaders, a top democrat and republican will try to work something out. cnn will carry this live. again, 5:45 p.m. eastern time. several minutes from now. we expect to hear the president's side of what went on in that white house meeting with

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they have three or four more minutes. we expect that in the next several minutes. right now i want to bring in lisa who is up on capitol hill. we already have a little bit about what went on, lisa. what can you tell us? >> reporter: right. it sounds like what happened is the president went in with his own plan a and plan b. we heard this from jessica yellin. that the president was going to again present the same offer that he had in the past week. if republicans didn't like that and didn't have a counter proposal, he was going to offer an up or down vote. what's interesting, candy, it didn't get to that point. instead of the president pushing for that up or down vote which sounds like a do or die last tactic, it didn't get there. instead, these five -- these four men and one woman decided that they had one last chance, that they talked over various

ideas, various proposals. in the end because it seemed the fate of this fiscal cliff deal rests with the senate acting first. we know that from the house speaker and also because of procedure, they decided that the two lead senators should in fact meet and figure out that deal first. this is the actual progress that we've had in weeks but we don't know what will come of it. senators reid and mcconnell have about a day to come up with a deal. it sounds like the senate may not come in tomorrow, which makes a lot of sense because senators reid and mcconnell have to figure out a poe teng deal behind closed doors and then may reconvene sunday around lunchtime. it not set in stone but that's what we're hearing for now. >> lisa, stick with me. i want to bring in jessica yellin. jessica, have you been able to pick up any intel at all or are

we just now awaiting the president's word? >> reporter: candy, i do have a little bit of information he and we're still awaiting the president. i'm told with a source that the meeting was constructive but this person also said that the president did, as we expected, according to a source, outline the proposal to increase taxes for those households that make more than $250,000 or more and extend unemployment insurance. and the president reiterated that this could pass both the house and the senate. he asked mcconnell republican senator minority leader what they wanted to dork how they wanted to proceed and i'm told the central sticking points from this source's perspective were regarding tax rates. in other words, at what level taxes should increase. and the estate tax, whether there would be a specific to keep the estate tax from going up. now, as we know, reid and mcconnell are going to work out

an agreement. the next element of this is that the president said if senators reid and mcconnell cannot come to a deal, the president did ask that republicans allow his alternate proposal come to a vote, the $250,000 measure. because the white house believes and democrats broadly believe that that could pass in both the house and the senate, candy. >> so jessica yellin is watching this from the white house as we await the president. i want to give you a couple of statements that we got up on capitol hill. these from senator reid and senator mcconnell, the respectively majority and minority leaders in the senate. the two men who are going to be talking over the next 24 hours to try to fix this fiscal cliff thing. here's what they had to say. >> we had a long meeting in the white house it was very

constructive. i hope that the next 24 hours will be very instructive with what we're able to accomplish. >> was there discussion of a concrete proposal? >> we talked about a lot of things. there's no concrete proposal at this time. we have a number of different directions that we're goi to try to take and we're going to see what can be worked out. >> we are engaged in discussions, the majority leader and myself and the white house in the hopes that we can come forward as early as sunday and have a recommendation that i can make to my conference and the majority leader can make to his conference so we'll be working hard to see if we can get there in the next 24 hours. so i'm hopeful and optimistic. >> wow. hopeful and optimistic. that sounds pretty good. i have our chief white house

correspondent jessica yellin and radio hill correspondent lisa. honestly, they are not calling each other names which yesterday was going on and optimistic and hopeful sounds about as good as it's gotten. >> yeah. there were more positive noises coming from all sides right now. and we are all looking for tea leaves. that is encouraging. given the amount of time left and the pressures on every party involved if positive and hopeful is enough at this time. >> might not get us there. >> might not get us there. i will also add that some republicans are insisting that there was never a discussion of this $250,000 or a proposal coming to the floor. maybe the president will dispute that in his remarks. not surprising that not all sides agreed to even what

happened in a meeting, candy. >> no, we shouldn't be surprised by that. lisa, let me bring you back in. from the point on capitol hill, what do we look for next? these two men, obviously they don't have to be in the same room but in the next 48 hours we're at a standstill here. >> right. i think what we're going to be looking for what my life will be like, standing outside of doorways, seeing who is going to whose offices, making phone calls and seeing if these two people are meeting in person or over the phone. just a guess, i don't think we'll hear something until sunday morning. leader mcconnell said the earliest that he thinks they could present something is sunday. and, of course, as i reported, we don't expect the senate to necessarily be in session tomorrow. the senators may have the day off except the two working on this deal. so i think we're going to try -- everyone will be fighting

furiously. with just the two men and their staff, we may not get details of an emerging deal until as soon as sunday. >> so there's still time, jessica, for this but it cannot be and will not be that kind of mega deal that everybody thought might be possible month ago? >> reporter: no, that's right, candy. that's a big disappointment at the white house and on capitol hill. it will not even if they get this done will not include broad tax reform. it will not include measures to bring down the self sit over the next ten years. what any smaller deal at this point might include, would include is some way to extend low tax rates for middle income americans. the white house is insistent it would include a perhaps the republicans incidence some way to keep down estate tax rates and more other

sort of in the weeds issues about how doctors who accept medicaid payments would do in the tax code. >> the so-called doc fix is important in the medical community and important to patients who are on medicare because it involves how much money the doctors actually get for treating a patient. let me bring you in. we expect to see the president in less than a minute. but the other thing that can't be in this is anything about entitlements. that's the huge issue for republicans. >> right. we had just a news conference today, the only republicans that came to the mike today came to the microphone to talk about entitlements here on the senate side, about medicare. they see that as the gaping hole in the united states budget and many of them are frustrated that so far there really has not been any specific plan from the white house to try and deal with it. also remember, unemployment benefits run out tomorrow. so the fiscal cliff actually starts tonight.

>> jessica, it was an interesting statement put out recently by a republican thinker who said that he thinks the president -- peekispeaking of t president, there he is. >> good afternoon, everybody. for the past couple of months, i've been working with leaders of both parties to try and forge an agreement that would grow our economy and shrink the deficit, a balanced plan that would cut spending in a responsible way but also ask the wealthiest americans to pay a little more. and above all, protect our middle class and everybody who's striving to get into the middle class. i still want to get this done. it's the right thing to do for our families, for our businesses and for our entire economy. but the hour for immediate action is here. it is now. we're now at the point where in just four days, every americans'

tax rates are scheduled to go up by law. every american's paycheck will get considerably smaller and that would be the wrong thing to do for our economy. it would be bad for middle class families and it would be bad for businesses that depend on families spending. fortunately, congress can prevent it from happening if they act right now. i just had a good and constructive discussion here at the white house with senate and house leadership about how to prevent this tax hike on the middle class. and i'm optimistic we may still be able to reach an agreement that can pass both houses in time. senators reid and mcconnell are working on such an agreement as we speak. but if an agreement isn't reached in time between senator reid and senator mcconnell, then i will urge senator reid to bring to the floor a basic

package for an up-or-down vote, one that protects the middle class from an income tax hike, extends the vital lifeline of unemployment insurance to 2 million americans looking for a job and lays the groundwork for future cooperation on more economic growth and deficit reduction. guys, i can hear you over here. i believe such a proposal could pass both houses with bipartisan majorities, as long as those leaders actually allow it to come to a vote. if members of the house or the senate want to vote no, they can. but we should let everybody vote. that's the way this is supposed to work. if you can get a majority in the house and you can get a majority in the senate, we should be able to pass a bill. so the american people are watching what we do here. obviously their patience is already thin. this is deja vu all over again. america wonders why it is that in this town, for some reason,

you can't get stuff done in an organized timetable, why everything always has to wait till the last minute. we're now at the last minute. and the american people are not going to have any patience for a politically self-inflicted wound to our economy, not right now. the economy's growing, but sustaining that trend is going to require elected officials to do their jobs. the housing market is recovering but that could be impacted if folks are seeing smaller paychecks. the unemployment rate is the lowest it's been since 2008. but already you're seeing businesses and consumers starting to hold back because of the dysfunction that they see in washington. economists, business leaders all think that we're poised to grow in 2013, as long as politics in washington don't get in the way of america's progress. so we've got to get this done.

i just want to repeat -- we had a constructive meeting today. senators reid and mcconnell are discussing a potential agreement where we can get a bipartisan bill out of the senate over to the house and done in a timely fashion so that we met the december 31st deadline. but given how things have been working in this town, we always have to wait and see until it actually happens. the one thing that the american people should not have to wait and see is some sort of action. so if we don't see an agreement between the two leaders in the senate, i expect a bill to go on the floor -- and i've asked senator reid to do this -- put a bill on the floor that makes sure that taxes on middle class families don't go up, that unemployment insurance is still available for 2 million people and that rlays the groundwork then for additional deficit reduction and economic growth

steps that we can take in the new year. but let's not miss this deadline. that's the bare minimum that we should be able to get done. and it shouldn't be hard since democrats and republicans both say they don't want to see taxes go up on middle class families. i just have to repeat, outside of washington, nobody understands how it is that this seems to be a repeat pattern over and over again. ordinary folks, they do their jobs. they meet deadlines. they sit down and they discuss things and then things happen. if there are disagreements, they sort through the disagreements. the notion that our elected leadership can't do the same thing is mind-boggling to them. it needs to stop. so i'm modestly optimistic that an agreement can be achieved. nobody's going to get 100% of what they want.

but let's make sure that middle class families and the american economy and in fact the world economy aren't adversely impacted because people can't do their jobs. all right? thank you very much, everybody. >> president obama's take on what went on, modestly optimistic after constructive talks, i believe those are the quotes. i have with me, ron brown, cnn contributor. ron, it's not how it works in washington, the straight up-or-down vote. >> it hasn't for a long time. there are two separate things here. there's the filibuster in the senate. but the biggest obstacles is the hastert rule in the house. it has always been hard to see bill that a majority of house republicans would vote for that would be acceptable to president obama. so in many ways, i felt for

really months, the only two choices were going over the cliff or abandoning that hastert rule and john boehner being willing to bring up a bill that could be passed by democratic votes, not passed by the majority of republicans. sounded a little more optimistic on the relative gauge we have than over the last couple of weeks. >> they're now running out of venues to discuss this. they discussed it at the white house. tried to get a deal between speaker boehner and president obama. now it's gone to the senate. harry reid and mitch mcconnell will try to work something out. after that, they have run out of both time and places to go for a deal. >> right. most of the time, when there's stalemate, it's tougher for the democrats than republicans because democrats are the party of activist government. they want things to happen. when things don't happen, they're kind of the loser. in this case, it is hard to see how the republicans are better off after the cliff, if we go over. >> we're going to have more right after a quick break. ♪ ooh baby, looks like you need a little help there ♪

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happening now, president obama says he's still optimistic a deal can be reached to avoid that fiscal cliff. just four days until the deadline. the president just spoke about his last-ditch talks with congressional leaders. plus, police are searching for this woman after another person was pushed in front of a new york train and crushed to death. and a huge piece of american history is under wraps. we'll tell you why. wolf blitzer is off. i'm i'm candy crowley. you're in "the situation room." so president obama says the time for action on the fiscal cliff is here.

he has a calendar, too. he just laid out his position after talks with top members of congress. everyone seems to agree it's up to senate leaders to make the next move and that the next 24 hours or so are crucial. we want to bring in our chief white house correspondent, jessica yellin. jessica? >> reporter: hi, candy. the president made it clear that he believes that this still can get done. he said he has a little bit of confidence, optimism that it would get done. but he expressed an enormous amount of frustration, it was clear, with congress' dillydallying, if you'll let me say that. he's frustrated that it's what he called deja vu all over again. and insisted that it's up to the senate now to get this done as the clock ticks to new year's eve. here's what the president had to say earlier. >> if we don't see an agreement between the two leaders in the senate, i expect a bill to go on the floor -- and i've asked

senator reid to do this -- put a bill on the floor that makes sure that taxes on middle class families don't go up, that unemployment insurance is still available for 2 million people and that lays the groundwork, then, for additional deficit reduction and economic growth step that is we can take in the new year. >> reporter: so that would be the president's fallback plan, urging the democratic leader of the senate to take up the president's proposal if the democrats and republicans cannot come to an agreement of their own. the problem with that, candy, of course, is even if that were to pass in the senate, there's no assurance that speaker boehner would even let it come to a vote in the house. not sure that that would get us anywhere closer to avoiding the cliff. >> in about 24 hours, we should know whether that really is it? we were just saying that they're running out of people and places to do this deal. >> reporter: they're running out of ways to hide and ways to put

this off. i would say if this is dying, it's dying a slow death. instead of a rapid one. but everybody's fanning the flames of hope. there's still a chance that life will be found. i don't want to milk this anymore. you know what i'm trying to say. >> i got you, jessica. our chief white house correspondent who's not going to see a new year's eve in the fun sense. we'll talk to you later, jess, thanks. we are seeing senate leaders take new initiative in the fiscal cliff standoff after their talks with the president. harry reid and mitch mcconnell talked about the meeting and the tough work ahead. >> i think it was a very positive meeting. there was not a lot of hilarity in the meeting. everyone knows how important it is. it was a very serious meeting and it took an extended period of time, as you all know, waiting for us. >> mr. president, i would just add -- i share the view of the majority leader.

we had a good meeting down at the white house. we are engaged in discussions, the majority leader and myself and the white house, in the hopes that we can come forward as early as sunday and have a recommendation that i can make to my conference and the majority leader can make to his conference. and so we'll be working hard to try to see if we can get there in the next 24 hours. so i'm hopeful and optimistic. >> let's bring in cnn's senior political analyst, ron brownstein, editorial director of "the national journal." i'm not sure where to begin here. it was constructive. everybody said the word constructive. >> hopeful, optimistic. >> mitch mcconnell is -- >> that's practically effusive for mitch mcconnell. >> the president said modestly -- but i listen to the other half of the president's talk. and it seems like he's preparing for nothing here. >> let's understand the box or

at least the framework and what you're talking about here. the fiscal cliff was a device that the president and the congress agreed to in 2011 to try to put more pressure on themselves to do what they couldn't do then, which was reach a big deal on the deficit. it's a noose of their own construction. and here we are, we're kind of defining dysfunction down. not going over the cliff is a pretty modest achievement that they may not be able to reach, almost completely gone right now is the discussion of doing what it was supposed to do in the first place, reaching a long-term deal. >> this is going to be a tiny deal -- >> it's avoiding the worst, rather than getting anywhere near what would be the best. >> there's also a process here. it's a great political forum and presidents have said, just vote on it. give everybody a chance to vote. that's not even quite that clear in the senate that's going to be possible. >> no. it hasn't really been possible -- increasingly less possible since the 1980s.

the routine use of the filibuster, once the filibuster was reserved for the biggest disputes. things like the civil rights fights of the 1960s. now it is routine. it requires really 60 votes to do anything in the senate. we have this intense level of party line voting with the filibuster. it's like a parliament system without majority rule. then you have the informal analog to that in the house which the majority party says, we're not going to bring anything up. it has to have 218 votes but it has to have a majority of the majority which gives a veto to the republican wing of the conservative party. that's where we'restick stuck right now. >> let's bring in lisa dejardan. is there in this particular case --

>> reporter: i'm hesitant to get into it because it gets into senate procedure. the simplest would be if the leaders agree not to invoke that 60-vote requirement. if they agree a majority would be enough. for that to work, the rest of the senate would then have to essentially allow it to. there would have to be no one that attempts a filibuster. that's the easiest way to get around the 60 votes. another way is to possibly use some sort of budget measure that could be part of the budget reconciliation process. that makes things more complicated. but that is the way the health care bill was passed. >> what are you expecting tomorrow? >> reporter: tomorrow, actually, i think it's going to be pretty quiet up here. i think there will be a few people who will be trying to work out some very heavy details, some staffers, especially the senators, mcconnell and reid themselves. but for those of us up here, if we get any details, it would be good. but i don't expect it. i think it's going to be a quiet day of doing the hard work and then perhaps tomorrow night,

we'll start perhaps hearing phone calls from leadership out to house members, out to some senate members to try and feel for whether they've got the votes on this. then i think sunday seems to be the earliest that we would get this grand, official presentation. but i think it's really too early to tell if even that will happen by sunday. i think we're just in the first hours of this potential new consortium of two trying to come up with something. >> thanks so much, lisa. jessica, let me bring you in one more time out of the white house and ask you, do you get the sense that anything much has happened other than the problem's been dropped in the lap of these two senate leaders? do you get the sense there really has been movement? >> reporter: no. but as we've discussed, when pressure mounts, that's when congress acts. and that's when the -- that's the frustration the president expressed. but you do hear sounds of more

encouraging progress sounding noises. i don't know what else to call it. people who want to get a deal done say that they are going to try. so that in itself is cause for some optimism. i'd say that the president sounded on his scale of anger, zero being known and ten being high, he sounded only about six. so there's still room for more frustration. so maybe the meeting wasn't all a loss. >> less than horrible? >> reporter: yeah. beyond that, it doesn't seem very much progress has been forged yet. >> even if we avoid the worst here, it really doesn't fill you with a lot of optimism about the next two years. we know at least for the next two years and probably the next four years, we're going to have divided government with president obama and republicans in the house. we have a closely divided country with democrats having advantage at the presidential level. they have to live with each

other. none of us are going away. and the issue really is, is red america and blue america willing to mediate its differences? otherwise we're saying, compromise is too hard for us, we'll leave it to our kids to do it for themselves. this doesn't auger very well for so many important issues. these two sides ultimately do have to leave with each other. we saw a republican congress in '96 and '97, they were able to get a lot done. can these two sides kind of find a way to mediate their differences because no one is going away and this could be a very long two years if not. >> thanks. i want to thank jessica yellin for us tonight. also lisa up on capitol hill for us. ron brownstein, thanks so much. for the second time this month, someone has been pushed in front of an oncoming train in new york and died. now the search is on for a suspect. and l.a. officials say it's a sign of the times.

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in new york right now, police are searching for a woman who fled from the scene after a gruesome death at a train station that's similar to a recent killing. police just released this sketch of the suspect. here's cnn's poppy harlow. >> reporter: twice this month someone is pushed from a new york city subway platform in front of an oncoming train and killed. it happened right on this platform late thursday. >> it's horrible. it was horrible. don't ever want to hear

something like that again. >> reporter: this man said he heard the final scream of the victim. james' train was halted because of the incident. >> they said, this is the last stop on the 7 train debris fell on the tracks, that's all they were telling people. >> reporter: witnesses say the victim was standing on the edge of this subway platform in queens when a woman who was pacing and talking to herself pushed him onto the tracks. the victim was a graphic designer who had moved to new york from india. >> feeling very bad. he has nobody here. and i heard that his parents died a long time before. >> reporter: surveillance footage captured this woman running from the station. police are searching for the woman they describe as heavy-set, in her 20s, wearing a ski jacket and sneakers. >> we do live in a world where our subway platforms are open and that's not going to change. >> reporter: at a news conference friday, mayor bloomberg and new york city police commissioner ray kelly were inundated with questions about the subway death. mayor bloomberg, a second subway

pushing death in this city in less than a month. i'm wondering what your reaction is to that? how can it be prevented? >> well, i don't know that there is a way to prevent -- there's always going to be somebody, a deranged person. >> reporter: just this month, a 58-year-old man was killed when a homeless man shoved him onto the tracks in times square. would you consider putting more police on platforms in the wake of what's happened this month? >> no. we think that we are properly deployed in the transit system. >> reporter: not something you'd consider at this point? >> you show me any place in this world where 5.5 million people get together that has the virtually zero crime rate that we do. >> reporter: the mta which runs new york city subways would not talk to us on camera but said people should stay away from the platform edges and be aware of their surroundings at all times. bill henderson advises the mta. what can be done to prevent things like this? >> well, you can't eliminate the possibility. but this is a very rare

occurrence. >> reporter: why not put some sort of barrier here? >> well, you have different car types running on the tracks on new york city subways. and they have doors placed at different points along their length. if you ran a different kind of car, you'd have to move the openings. >> reporter: just not practical? >> just not practical. >> reporter: very expensive? >> very expensive. >> reporter: keep in mind, subway deaths like these are very rare here in new york city. years go by without them happening. and the same is true in other major cities like washington, d.c. and boston. poppy harlow, cnn, new york. now that the space shuttle program is history, "atlantis" is under wraps before it gets a new home. it's quite a sight at the kennedy space center, ahead. what a night, huh? but, um, can the test drive be over now? head back to the dealership? [ male announcer ] it's practically yours. but we still need your signature.

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folks here in washington were treated to a remarkable sight this year. the space shuttle "discovery" flying on the back of a jet swooping past the washington monument on its way to its new home at the air and space museum. the shuttle "endeavour" went on a road trip through los angeles to get to the california science center where it's now on display. and now the shuttle "atlantis" is taking its place in history without traveling anywhere.

cnn's john zarrella is at the kennedy space center. hey, john. >> reporter: hey, candy. you're right, "atlantis" is really the only one of the shuttles that didn't have to take wing to get to its future museum landing site. "atlantis" in november literally just went ten miles down the road from the vehicle assembly building here to the visitor complex. for the viewers out there saying, where is it? that's it right there behind me. that is "atlantis." and it is completely wrapped in shrink wrap. why is that? because they are building the facility, the museum around the shuttle. so it's quiet here now. but i have to tell you, all day today, the workmen were just hammering and they're putting up scaffolding and they're finishing this up by july when the grand opening will be. in march, they're going to actually unwrap "atlantis" when most of the work will be done then. but you can see it's on a 45-degree angle.

that's because it is tilted the exact way that it would be when it flew in space. it's suspended on some giant beams there. 153,000 pounds, the shuttle weighs in the current configuration that it is. and you know it last flew in july of 2011. it was the very last shuttle flight, sts-135, went to the international space station. that was the end of the space shuttle program. on november 2nd, they rolled it out, ten miles from the vehicle assembly building over here to the visitor complex. i'm joined by tim macy. the interesting story about that, that whole wall back there was not there. you actually had to get this vehicle in here and that had to be a trick. >> it was a trick. we knew it was going to work. on paper, it was great. no problem, no worries at all. bull when we came around the corner, that 85-foot whip looked pretty tight. the wings are 82 feet from tip to tip.

came around the corner, backed it up a couple of times and it came right up to the spot. >> reporter: but you never had a concern you were going to make it? >> never had a concern. >> reporter: tim, thanks very much for taking time to be with us. one of the things is people are not going to be able to touch it. you're not going to be able to go inside any of the shuttles because they are literally national treasures. there's a walkway down below here. there will be all kinds of interactive exhibits here. the hubble space teleskop mock-up as well. this is a $100 million facility that they're building here. 90,000 square feet. it's going to be fascinating. we're glad we got this opportunity to come in here today. i've seen the shuttle in all kinds of configurations but this is clearly the weirdest. >> first time you've seen one shrink wrapped. >> reporter: no, never. >> thank you so much, john. you get all the good assignments. have a great new year thank you.

we're taking a closer look at what will happen if america dives over that fiscal cliff. and if you're a milk lover, brace yourself for a shock at the check out aisle. share everything. share brotherly love. share one up's. mom ? mom ? the share everything plan.

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♪ pampers. peaceful nights. playful days. happening now, a killer discovery, weapons of war turned up at the gun buyback event in los angeles. as americans get ready for the new year, what will really happen if politicians drop the ball and we go over the fiscal cliff? and that time again. anderson cooper and kathy griffin give me a raucous preview of their annual new year's eve bash. wolf blitzer is off. i'm candy crowley and you're in "the situation room."

we heard president obama say he's modestly optimistic that a last-minute deal can be reached with members of congress before america goes over the fiscal cliff four days from now. he's warning that no one will get everything they want, but he says that shouldn't stand in the way of reaching an agreement. >> we're now at the last minute. the american people are not going to have any patience for a politically self-inflicted wound to our economy, not right now. >> we are joined by former labor secretary robert reich, the author of "beyond outrage." i wish we had more time. i'd ask you all about how to fix it. but let's focus on this one

part, secretary reich. you listened to the president. what did you hear? >> candy, i heard basically washington boilerplate, keep our fingers crossed, this is going to be a hail mary, but i have no idea how this is going to come out. >> when you hear him say, i've asked for an up-or-down vote, do you hear, there's a possibility or do you hear, uh-oh, this is a guy looking to position himself for after we go over the fiscal cliff? >> well, undoubtedly the president wants to be seen as doing everything he possibly can to avoid going over the cliff. but the chances of avoiding, going over right now are very, very small. mitch mcconnell has to basically cooperate on the senate side and not do any kind of procedural maneuvering and john boehner in the house has got to be willing to put the bill on the floor if it comes over from the senate. and even if a majority of republicans are against it -- and that's asking a very great

deal of both of these republican leaders. >> lots of ifs, and or buts in getting a deal. let's talk about not getting a deal for a second. let's say you wake up january 2nd, you live in racine, wisconsin, how is your life going to be changed? >> not dramatically. your social security temporary tax holiday is going to be over regardless. that means the typical family is going to be paying about $1,000 more in 2013. it would happen automatically anyway because it's not part of the fiscal cliff negotiations. your income taxes might go up a little bit. the irs and the treasury department do have some authority, some discretion as to whether they will change the withholding temporarily. i don't think they'll do that unless they have a very, very clear signal from congress that congress in fact is going to extend the bush tax cuts at

least up to $250,000. so i think your weekly paycheck may be shaved smaller. i don't think most people are going to notice it. unemployment insurance benefits, if you are unemployed, long-term unemployed, those are going to come to an end. that's going to be a big, big hit for 2 million american families. >> and that was my next question. who will feel it first and the most? i suspect that's long-term unemployed. >> yes, long-term unemployed are going to be feeling it immediately. again, the high-income taxpayers, they will see it. whether they feel it, some of them -- if you're over $1 milli million, you may not feel it at all. but your taxes are going to be up substantially. but they're only going to go back to the bill clinton days. and anybody who remembers the bill clinton days and the bill clinton clinton know that is those taxes were not onerous. they didn't stop the economy from doing quite well.

now, on the spending side, the president's proposing really no spending cuts until there is a grand bargain hopefully in january. but without any kind of a bargain at all before then, assuming we do go over the fiscal cliff, then there are going to be substantial cuts in military, contracting -- krirlt contract military contractors are going to feel it almost immediately. and the discretionary spending. that's everything the country does other than the military or social security or medicare. >> so i just want to get one thing straight about the tax rates. that is that the treasury department, if it senses that, yeah, they're going to get a deal here fairly quickly, could say -- can direct how much withholding employers have to take out of paychecks? is that correct? >> yes, that's right, candy. the irs, they're part of the

treasury department, they do have authority, they do have discretion to alter those withholding tables. but i don't think they will alter them unless they get an absolutely clear signal from congress that they should be altered. there's no reason for them to play any guesswork. they don't want to be caught three weeks or four weeks or ten weeks into the next fiscal year with revenues being substantially less than they otherwise should be or would be. >> and we talked to "the wall street journal's" steve moore a little while ago and i asked him about the psychological effect if we go off the fiscal cliff. i want you to hear what he said. >> i talk to small businessmen and women all the time. they say, we're not hiring now. we're canceling a lot of our plans to make new expenditures, which you need to do if you want a vibrant economy. and we're really seeing the impact in the stock market the last couple of weeks. so this is not a good way to run

a railroad. and the economy is already taking a hit because of all this turmoil in washington. >> you agree with that, that we've already seen the impact of not having a deal to avoid this cliff? >> i don't think we've seen all of the impact. undoubtedly, stephen moore is correct that the stock market is reacting, particularly over the last couple of days. but most people, most institutions, most companies, most consumers assume that there will be some sort of a deal or if there's not a deal, at least by monday, then there will be a deal within the next few days. and i don't think it has really sunk in to most of the players in this economy that there is a small possibility of no deal at all, even no deal retroactively in january. >> on that cheery note, let me thank you for your time. >> i wish i could be more upbeat. i hope you have a good new year, notwithstanding, candy. >> thank you. you as well, sir. thanks for joining us.

>> bye-bye. milk lovers could be in for some sticker shock after the first of the year. how about $7 per gallon? a side effect of fiscal cliff negotiations in washington is impacting a lot of other matters. the farm bill expired last year with no measure from congress to replace. one of the protection for farmers that goes away january 1st is the dairy subsidy. that means the price of milk could skyrocket. i brought that up with agriculture secretary tom billsack who says milk prices are just the beginning. in the short term it seems to me the sales job has to be, why does anybody care if there's not a farm bill on january 1st? what will happen to me or my family sitting here in washington, d.c.? >> well, if you like anything made with milk, you're going to be impacted by the fact that there's no farm bill. if there is not an extension of the existing bill or a new bill, basically on january 1st or shortly thereafter, permanent

agricultural law goes back into place, 1949 law. which means the federal government will go back in the business of strongly supporting the dairy industry by raising the price support or support for dairy products to $38 a hundred weight. that's double what the price is of milk today. that's going to ramp up so consumers are going to be a bit shocked when instead of seeing $3.60 for milk they see $7 a gallon for milk. that's going to ripple throughout all of the commodities if this thing goes on for an extended period of time. so it impacts consumers. it impacts those of us who are concerned about the energy security of this country because the farm bill contains ways in which we can promote alternative energy sources, ways in which we can create a biofuel industry that's robust and creates consumer choice. for those concerned about exports and the jobs connected in this country to agriculture exports, we lose the potential capacity to promote and market exports without a farm bill. if you're concerned about the

ability to provide adequate nutrition and you are a supporter of farmers markets and you want to see an expansion of that, can't do it because there is no farm bill. if you like the idea of expanding habitat opportunities, you like to fish or hunt, your hobby, your vocation, if you will, in that area is also going to be affected by no farm bill because a lot of the conservation programs are not extended or ended. if you're a farm family, obviously you're going to be impacted. across the board, in virtually every aspect of our economy and society, there is an impact and an effect by not having a farm bill. >> secretary vilsack was also the former governor of iowa, told me he also thinks there's no farm bill because rural america is losing power and influence as more of america lives in cities and suburbs. my interview with secretary vilsack this sunday on "state of the union" at 9:00 eastern. might not expect to find

launchers turned in at a gun buyback program. but officials aren't batting an eye. >> i don't think anyone should be surprised two rocket launchers were turned in. this is l.a. copd makes it hard to breathe, but with advair, i'm breathing better. so now i can be in the scene. advair is clinically proven to help significantly improve lung function. unlike most copd medications, advair contains both an anti-inflammatory and a long-acting bronchodilator working together to help improve your lung function all day.

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officials in los angeles say they have terrifying proof that their gun buyback program was a success. kyung lah is in l.a. what did they find? >> reporter: a lot of weaponry. what we could not find is a police officer who was stunned by this. one of the reasons that they wanted to show off these rocket launchers is that they hope to give americans some pause and some perspective. a rocket launcher, not just one, but two handed over to police in this week's gun buyback day. shocking? not to police who have seen it before. among the roughly 10,000 guns turned in to police by the citizens of los angeles since 2009. >> we look like we're in a third-world nation when you seize all these weapons from individuals and the question you have to ask is, why?

>> reporter: these rocket launchers were u.s.-made, owned privately though illegal and turned over to police under the no questions asked buyback. they thankfully had no rockets in them. police also collected 75 assault rifles that people traded in this week for gift cards. >> i don't think anyone should be surprised two rocket launchers were turned in. this is l.a. >> reporter: l.a. and much of america, says aaron cohen, a security expert advising clients around the world. this should be a reality check, he says and a sign of how military weaponry can so easily end up in the wrong hands, like they did in the newtown massacre. >> way too many weapons are out on the streets. it's ridiculous. >> reporter: do you think it's gotten out of hand? >> i think that the system of issuing them has gotten out of hand. and i think we have to look at the entire safety system involved with giving handguns

out. >> reporter: gun shows and easy background checks, cohen says, that adds up to an overly armed america. the people who turned in guns, most of them legal, came from all walks of life. >> i have grandchildren and no matter how secure you think your gun is, we've seen what happens. so i decided to turn it in. >> reporter: and so the big question, where on earth did these rocket launchers come from? well, the lapd says no questions asked, part of the reason why their gun buyback is to successful, that no matter what they get in, they will not ask where it came from. candy? >> kyung, handguns are one thing. rocket launchers or something else -- has this ever happened before? >> reporter: you know, we spoke to the gun division. and the officers there say this is the fifth one that they've gotten since 2009. the fifth one that people have handed over willingly.

so they believe that there are more out there. and something else, another number that i actually find more stunning than five rocket launchers since 2009, is that there are approximately -- and these are estimates -- approximately 8 million guns in the city of los angeles. >> that's a lot of guns. kyung lah, thank you so much. appreciate the story. russian president vladimir putin has signed a controversial bill barring americans from adopting russian children. the new law is heartbreaking for hundreds of families in the adoption process. the move is seen as retaliation for a law president obama signed this month imposing travel and financial restrictions on human rights abusers in russia. i talked about the new ban with lee allen who adopted two boys from russia in 1999. >> when we talk about the families, it's so important to remember that these are kids we're talking about. these are not political pawns. >> these are little children in institutions at this point. >> babies.

>> so you have your two boys here and they're beautiful. we have them in the studio here. have you talked to them about this? are they aware of this? what are they saying? >> well, my guys have grown up here in america. they're very proud of your heritage, being russian. but they're also thriving in america. they're athletes. they're getting a great education. they are -- they're just wonderful young men, absolutely wonderful. and i just can't help but think of what would have happened to them had they stayed in an orphanage in russia. the very best orphanage in russia can't compare to a home, to a family. >> anywhere. and a family that wants them. >> absolutely. >> and you had met your sons -- >> well, i had met them on video. i had gotten a video and they had become mine. they were in my heart already. i just wanted to scoop them up. and when the ban came, the mor tarm ca

moratorium came, we didn't know it wasn't temporary. it was devastating. i can't imagine these kids who have met their families -- >> the families have been over there and met these kids. >> they're dreaming about their mom, dad, brother, sister. and now they are going to have to wake up from the dream and realize they're still in the nightmare of a russian orphanage. >> and is there something that can be done that you see that's an easy fix here? to me, it must be the most helpless feeling. here's a child you consider your child and they're caught up in something so far above your pay scale and there's nothing you can do. >> governments and publics are so big. and the families are so small. and the children are so tiny, that it is. it is a very helpless feeling. but there are very, very dedicated people in the government and in nongovernment organizations that are working to make this go away. and we're very optimistic and

very hopeful that president putin somehow will become a hero to these kids. >> groups such as amnesty international oppose the ban. the state department says it deeply regrets the new law. going out front on today's white house fiscal cliff meeting, john avlon is sitting in for erin burnett tonight. what have you got? >> we have congressman steve laterett. and allegations of abuse right next to the pentagon. it's disturbing and fascinating. >> sounds like a great show, john. you never know what will happen when anderson cooper and kathy griffin ring in the new year on cnn. they'll give us a preview. and i asked kathy about her obsession with a certain bearded are cnn news anchor. [ woman ] dear cat, your hair mixes with pollen and dust.

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just an update here on the state of play for those fiscal cliff talks which are now basically taking place between

two men, senator reid who is the majority leader, the democratic leader in the senate, and mitch mcconnell, who is the republican leader in the senate. now, what we are hearing from the senate majority leader in a statement he just put out is that he is preparing a bill that he will be ready to put up for a vote monday. and what it will do is prevent a tax hike on middle class families and that is defined by the white house and others as anyone making up to $250,000. it will also include provisions that the president said he wanted, among them, extensions for long-term unemployed. so what we have here is senator reid saying, if i don't get a deal with senator mcconnell between now and monday, i've got a bill that i'm ready to put on the senate floor. so that is where we are now. we now want to move on to some of the headlines in the news. t brutal sexual attack sparked passionate protests across i believed yeah. she has died. lisa sylvester is here with that

and more. >> tragic story. the 23-year-old woman who suffered a gang rape and severe injuries on a new delhi bus two weeks ago died a short while ago at a singapore hospital. earlier they said she was experiencing organ failure. her attack led to mass protests across india. where such cases have increased drastically the last 40 years. the death toll rises in syria. russia has invited the head of the government for talks in spite of nations that recognize the national coalition as the country's legitimate representative, over president bashar al assad. a florida man has pleaded guilty to smuggling dinosaur fossils into the united states. federal prosecutors use these skeletons as evidence in the case. the accused importing a 70

million-year-old bones of a dinosaur from mongolia. he faces up to ten years in prison. how does he even get that stuff into the united states? it's not like you can sneak it into your suitcase. >> lisa, i appreciate it. anderson cooper and kathy griffin are preparing to host their annual new year's eve bash on cnn. we don't know how much they're preparing, they tend to be unscripted to put it mildly, take a listen. kathy, i know somebody tells me, i'm not sure this is true, somebody tells me you're obsessed with wolf blitzerer. yet every year it's me talking to you guys. do you take it personally? do you think there's something to this? >> i think wolf is wise to stay away from kathy griffin. i once -- i don't know if you know this story, candy. i lent -- kathy griffin once skad to come to me house in long island. like a nice guy i sent her a

guy, she wanted to go there a day in advance. >> to clean up the place. >> just to go -- first of all, she arrived, she was terribly disappointed,think she thought it was going to be like the house in downto know abby. >> the chef never arrived. >> there is no chef. anyway. she arrives. and while time on the news that night, during commercial breaks i'm receiving tweets. not even tweets. text messages from her. >> sexts. >> she's sending naked pictures of herself sprawled on my couch, drape the over the kitchen counter. >> i think candy has done that on a daily base sister. >> i had to get a wet vac and cleaning crew in there for a week. >> moving this conversation along. >> candy, put your shirt back on, this is embarrassing. >> okay. um -- i said, why don't you ask anderson lwhat i sexted him on election night?

>> sexy messages for david gergen. >> top that, crowley. >> usually i can follow up really well but there's no place to go after sexting david ger den. >> the embarrassing thing is i showed david the messages, she was pressuring me. >> he finds me attractive. >> and hpd? >> he got red in the face. >> so what you're -- >> start at the beginning. >> when you're on the air live, let's say, on new year's eve, for instance, anderson, who gets more worried, you or kathy, about what the other one going to say? >> i'm the only one who's worried. >> i have no worried whatsoever. >> that's a disadvantage, anders anderson. >> i think kathy with each year has a growing sense of empowerment. the first year she was a little, you know -- she was only on for a brief --py is was timid. >> exactly. last year she stripped. the year before that she used

curse words. the year before that she told some poor person in the crowd -- i can't say what she told the person. >> i believe there was one year you called me the day before, "girl, i just got back from jalalabad, you're going to have to take this one." >> true story, anderson? >> i don't think i said girl, i don't think it was jalalabad. >> one of the bads. >> i just got back from somewhere, i'm exhausted, you're going to have to carry this one, i might have said that. >> be careful what you ask for. >> every year he's said that to me. >> there will be lots more where that came from, monday night, cnn's new year's over live with anderson cooper and kathy griffin starts at 10:00 p.m. eastern from times square. i knew you'd come. like i could stay away.

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branch in new zealand being taught to shift gears -- >> good! >> reporter: and steer. >> clever boy! >> reporter: first on carts, then on actual cars with the controls modified for doggie legs. >> a! >> reporter: "a" is the command for accelerate. >> good boy! >> reporter: just months ago the idea of a dog driving was considered a joke. a gag subaru used to advertise cars. and remember those old snl bits? let's hope the new zealand dogs -- >> look out! >> reporter: do better than the driving cat did. the motorist mutts were celebrated by gawker, "dog drives man." "finally, dogs who chase cars will have something to do once theyat